COURT FILE NO.: 18-65526
DATE: 20220621
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
United Glass Services Inc.
Plaintiff
– and –
2138825 Ontario Inc. and
1826458 Ontario Inc.
Defendants
Raymond Di Gregorio, for the Plaintiff
No one appearing
Mitchell B. Rosenblatt, for the Defendant, 1826458 Ontario Inc.
HEARD: May 9, 10, 11, 12 and 13, 2022
AMENDED REASONS FOR JUDGMENT
Justice l. sheard
Overview
[1] The plaintiff, United Glass Services Inc. (“United”), sues 2138825 Ontario Inc. and 1826458 Ontario Inc. (“182”) for payment of $354,125.85 representing amounts due and owing under invoices submitted by United for labour and materials supplied to convert 90 Beach Rd., Hamilton, Ontario (“Beach Rd’), a large industrial space, into a licenced cannabis-growing facility to be operated by Radicle Medical Marijuana Inc. (“Radicle”). United has brought a separate action[^1] against Radicle, and the officers and directors of Radicle and 182: Rami Reda (“Rami”), Ziad Reda (“Ziad”),[^2] and Upadhyaya Rakeshkumar. The defendants in that other action have agreed to be bound by the finding in this action as to the amount, if any, to which United is entitled, pursuant to the invoices submitted to 182.
[2] In its statement of defence, among other things, 182 asserts that: 1) United failed to do the work it had agreed to do; 2) much of United’s work was deficient; and 3) United did not complete its work in a timely manner.
[3] 182 alleges that it spent close to $280,000 to correct deficiencies in United’s work and that any amount found owing to United should be reduced by “charge-backs” - the amounts spent by 182 to correct United’s work. On consent, 182’s counterclaim for losses it claims to have suffered by United’s delays in completing the work and the delays caused by having to correct United’s work, was dismissed at the outset of trial, with costs to be determined.
[4] United’s claim against 2138825 Ontario Inc. and a related construction lien action, Court File No. CV-18-00065729, were resolved prior to trial.
Issues for Trial
[5] At the opening of the trial, the court was advised that the parties’ positions were as follows:
A. United
[6] United’s position at trial was that 182 agreed to make payment to United for work performed by United or its subtrades, on a labour and materials basis. United performed the work as agreed and, apart from small issues usual to a job of this magnitude, which were, according to United, fully addressed by United or its subtrades while United was on site, 182 voiced no complaints about the work performed by United or the subtrades working under United.
B. 182
[7] 182’s position was that there were deficiencies in the work performed by United or its subtrades, and that 182 spent $280,000 to re-do work performed by United or United’s subtrades.
[8] In opening submissions, counsel for 182 stated that that the central issue in this action was whether United was entitled to be paid for the work invoiced and/or whether 182 was entitled to a “charge-back” equal to what 182 paid to correct deficiencies in the work for which United submitted invoices.
[9] At trial, evidence was also given on behalf of 182 that, in respect of work to be performed by United and its subtrades from and after December 12, 2017, United agreed to change its agreement with 182 from a labour and materials supplied basis to a fixed quote basis. On the basis of the fixed quote agreement it claimed to have with United, 182 asserted that total payments made to United exceeded the fixed quote, and, consequently, 182 owes nothing further to United. 182’s assertion that it had a fixed quote agreement with United for work performed on and after December 12, 2017, was not pleaded and was first raised at trial. At trial, United’s representatives disputed 182’s assertion and maintained that United was always to be paid on the basis of labour and materials supplied.
Disposition
[10] To succeed in this claim, the onus was first on United to establish that it is entitled to payment of the invoices submitted; that they were in accordance with the agreement with 182 and that the labour and materials reflected in the invoices were, in fact, supplied.
[11] Based on the evidence that I accept, I conclude that United met its onus that it is entitled to payment of the amounts outstanding on the invoices submitted to 182. The invoices were filed as exhibits at trial and, before adding in a “late fee”, total $347,020.40[^3].
[12] Next, the defences raised by 182 were considered to determine whether the defences could succeed so as to reduce the amount claimed under the invoices.
[13] With respect to 182’s defence that a credit or “charge-back” should be allowed to reduce the amount otherwise due to United, no cogent evidence was presented at trial. As discussed more fully later in these reasons, despite the oral testimony given by Rami and Ziad concerning alleged deficiencies, 182 offered no documentary, independent, or expert evidence at trial to support 182’s defence that it incurred damages, or the amount of the damages, to repair or correct any alleged deficiencies. In the absence of that evidence, 182 cannot succeed in its defence that the amounts claimed by United should be reduced by any alleged “charge-backs” or at all.
[14] At trial, 182 also asserted an alternate defence, not previously pleaded, that by email of December 12, 2017, sent by Richard Robitaille (“Robitaille”), United’s principal, United agreed to a “fixed quote” fee of $350,000 to complete the balance of work it had committed to complete.
[15] As will be fully explained below, this new defence was not supported by the evidence and 182 failed to establish that United had intended to, or did, convert the existing labour and materials fee agreement, to a fixed quote. As a result, 182 cannot succeed in this defence.
[16] Accordingly, for the reasons that follow, I find that United is entitled to judgment against 182 on the invoices submitted by United, which I calculate to total $347,020.40[^4]. I decline to award the 3% “late fee”, added by United to some of the overdue invoices, as the evidence was lacking that 182 had agreed to pay a monthly “late fee” on overdue accounts. However, United is entitled to prejudgment interest on the amounts owing on the invoices, which I do award: interest on the balance owing under each invoice is payable and is to be calculated from the 30th day following the date of each account, using the prejudgment interest rate set out in the Courts of Justice Act, R.S.O. 1990, c. C.43, s.128(1).
Background
[17] At the time of the events relevant to this action, United was a sole proprietorship owned by Robitaille and his wife, Sherry English (“English”). Its principal business was the fabrication and/or installation of steel and steel-framed windows and doors.
[18] Beach Rd. was commercial/industrial space leased by Radicle, with the intention that it be renovated to house a medical marijuana growing operation, licensed by Health Canada.
[19] Rami and Ziad and their father, Mohammed Reda, are engaged in Reda family businesses. Prior to embarking on the project that gives rise to this litigation, United had done work on Reda-owned commercial properties. For example, in 2016 United did a significant piece of work on a property located on a strip mall located on Concession St. in Hamilton, Ontario. The work included the installation of new steel and glass doors and steel and glass storefront windows.
[20] Prior to the events that led to this litigation, Robitaille had enjoyed a warm business relationship with members of the Reda family, who considered each other as friends. In keeping with their warm relationship, when the Reda family was given an award for the Concession St. renovations, performed, in part, by United, they invited Robitaille and English to join them at the award ceremony.
[21] In 2017, United was a relatively small, unincorporated, sole proprietorship. It had approximately six employees, including English, who was responsible for such things as marketing, accounting, and human resources. Robitaille handled the construction and supervised his work crew. On the Beach Rd. project, Robitaille agreed to arrange for and supervise a number of sub-trades whose services were needed to complete the renovation, which were required to meet Health Canada standards for a medical marijuana growing operation.
The Parties
United
[22] Robitaille is 58 years old. He has a grade 12 education with some additional training through Mohawk College in blueprint reading and construction. Throughout his career, Robitaille has been in the construction business, working with heavy structural steel. Robitaille trained in the glass industry and in the installation of glass, using structural steel in frames for windows and doors. When employed by other construction companies, Robitaille rose to the level of superintendent, and, as such, Robitaille took part in determining the manpower and equipment that would be needed to complete a specified job.
[23] At the age of 47 years, Robitaille was a certified glazier and began to operate United, his own business. United did work on residential installations and later moved to commercial work, installing steel and glass doors in industrial buildings and strip malls, etc. United fabricates aluminum doorway systems and, at the time of trial, had seven employees. Robitaille acts as foreman or superintendent on all projects.
[24] United’s front office — invoicing, payroll, marketing, etc. — was handled by English.
[25] Robitaille and English both testified at trial.
182
[26] 182 is a construction company. Its principal is Rami. 182 was to complete the renovations to Beach Rd. for its intended tenant, Radicle. Rami has a Bachelor of Commerce. At the time of these events, he had little hands-on experience in construction. Rami had hoped to take on other and bigger construction projects and Robitaille, with decades of experience, would join with him as a partner on future projects.
[27] Rami was also a principal of Radicle, but it was always intended that Ziad, also a principal of Radicle, would operate the cannabis growing operation. Ziad had no experience in the construction industry or in cannabis growing. However, he worked to learn about and to develop an expertise in the operation of a licensed cannabis growing facility.
[28] 182 hired a project manager, Dean Fulton (“Fulton”), to oversee the Beach Rd. renovations. Fulton was on site daily. 182 hired its own HVAC, electrical, and plumbing contractors as well as other specialized contractors, including security experts, to provide some of the work required to meet Health Canada licensing guidelines. Pursuant to an oral agreement with 182, United was to perform steel, glass, and other work, some of which United was to subcontract out, such as the laying of epoxy floors throughout. At trial, Robitaille agreed that, in addition to supervising his own crew and subcontractors hired by United, he was also to assist 182 as directed by 182, Rami, Ziad, and Fulton; Robitaille denied that he was acting as general contractor on the Beach Rd. project.
[29] In his evidence-in-chief, Rami asserted that Robitaille acted as the general contractor on the project. However, in cross-examination, Rami agreed that 182 was the contractor, and Fulton, the project manager. Rami also acknowledged that Fulton was always on site and that Rami and Ziad also spent a great deal of time on site.
[30] Based on the evidence more fully discussed below, I conclude that neither Robitaille, nor United, was acting as general contractor of the Beach Rd. project, and that, while Robitaille offered input on the project, he did not make decisions: these were made by Rami and Ziad with the advice and guidance of Fulton.
The Beach Rd. Project
[31] Rami spoke to Robitaille about his hope to become involved in the medical cannabis business. Robitaille expressed interest and two months later was shown drawings of the layout of the Beach Rd. floor space and the proposed materials to be used for walls and floors. Robitaille understood that Beach Rd. was to be used for a legal cannabis growing operation permitted and licensed by Health Canada.
[32] United submitted a quote to construct the steel siding and doors on the outside of Beach Rd. This quote was accepted and United completed that work.
[33] On May 1, 2017, United also submitted a quote to complete specified work on the interior of Beach Rd. at a quoted cost of $681,250. The quote included work to be performed by United’s crew and by subtrades hired by United and was based on an estimated floor area of approximately 24,500 sq. ft. When 182 changed some of the materials to be used, United withdrew this quote.
[34] However, United and 182 did reach an oral agreement whereby United would do interior work on Beach Rd., for which United would be paid on the basis of labour and materials supplied. United was to arrange for subtrades, as needed, and would be entitled to charge 182 a premium of between 15% and 20% of the amount billed by United’s subtrade. This 20% charge was intended to compensate United for securing and supervising the subtrades, assuming responsibility for payment of the subtrades, and for the other related administrative work and costs undertaken by United. Pursuant to this oral agreement, 182 and United agreed on the hourly rates to be charged by Robitaille and his work crew, as well as the premium to be charged by United on equipment and materials supplied and paid for through United.
EVIDENCE OF UNITED
[35] United called two witnesses: Robitaille and English.
ROBITAILLE’S EVIDENCE
After work commenced at Beach Rd.
[36] Robitaille testified that the work to be done and the timing of the work to be carried out was directed by 182 and Fulton. Fulton was on site every day and provided instructions and direction by email, on site, and in daily meetings.
[37] In addition to Fulton, throughout the renovations, both Rami and Ziad also spent time on site to monitor the progress of the work and to ensure that Beach Rd. could and did meet Health Canada’s licensing specifications. In the months prior to the completion of the renovation, Ziad and employees of Radicle also performed some manual labour on the site.
[38] Work on the inside of the site began in August or September 2017. Robitaille testified that he and his crew worked seven days a week, 16 hours per day. He testified that he tracked the time logged by him and his workers, and the materials used on site, and reported it to English. Using those records, and the invoices United had received from subtrades and suppliers, English would prepare and submit invoices to 182. United invoiced 182 regularly, sending the invoices to Rami or, as he directed, to one or more of Rami, Ziad and Fulton. By and large, until February 2018, United’s invoices were paid promptly.
[39] Robitaille testified that he and United’s crew provided services as directed by Rami, Fulton and Ziad, which, at times, included using United’s crew to help other trades.
[40] Robitaille stated that in the 2017-2018 winter, he was routinely the first to arrive at the site. He would first check the heaters, then see what materials were on site for his crew, followed by a discussion with Rami and Ziad about what needed to be done. Robitaille billed and was paid for his time. In Robitaille’s view, the work was progressing well.
[41] Robitaille testified that the only complaints United received about its work related to small issues, usual to any job. Such complaints were typically communicated in a phone call from Rami or Ziad, and, Robitaille testified, were remedied. Robitaille testified that he checked the progress on the job against the plans and took photographs as the work progressed. Those photographs were entered as exhibits at trial.
Problems with Epoxy Floors
[42] In its statement of defence, 182 claimed that a major deficiency was related to the epoxy floors installed by United’s subtrade.
[43] Robitaille explained that it was at the direction of 182 that the epoxy floors were poured prior to completion of other construction work. After the floors were poured, heavy and dirty equipment was brought onto the floors, which caused damage. Robitaille acknowledged that portions of the epoxy floors had to be re-done as a result, and that United charged 182 for its charged labour and materials for these repairs.
[44] Robitaille stated that it was 182 and Fulton who directed when work was to be performed, even though doing so posed a risk that certain work, including the epoxy floors, would be damaged when another contractor came in to do work.
[45] Robitaille testified that he recommended that epoxied floors be covered, which was sometimes done, upon the direction of Rami or Ziad. Robitaille stated that Fulton was fully informed that the floors had to be protected. Robitaille stated that it was up to Fulton and 182 to decide what steps were to be taken to protect the floors. Robitaille assumed that 182 decided not to always protect the floors because it was less expensive to re-coat any damage to the floors than to cover the floors.
[46] Robitaille testified that he also recommended to Rami that he wait to epoxy the floors until all other work was completed, but Rami did not accept Robitaille’s recommendation, which might have delayed the completion of the work, while the epoxy floors cured.
[47] Robitaille testified that United was not in charge of the construction and took direction from 182 and Fulton as to what and when work was to be done; 182 knew that United had to do steel work after the epoxy floors were installed and that the floors were also exposed to damage by other trades brought in by 182, such as the HVAC and refrigeration trades.
Events on and after March 16, 2018
[48] In a list dated March 16, 2018, posted by Fulton inside the facility, Fulton identified the work remaining to be done. Fulton identified work to be completed by Untied as: doors and hardware “per posted list”; silicone touch-up to be done on completed “FRP” (referring to the wall panels); floor patching where the epoxy has been chipped; silicone where needed on the wall coves and column bases; and installation of ceiling decking and rods for the HVAC. Robitaille testified that United did not end up doing that last piece of work. Robitaille also testified that the list included work to be completed by other trades.
[49] Robitaille testified that apart from a request to patch the chips in the floor and to fill in the base of the columns, United received no complaints about how the floors had been done.
[50] Robitaille’s photographs documented the progress on the project in 2018. For example, a photograph showed areas where the floors had been epoxied and where construction work was still ongoing; for example, Rami is photographed on a ladder while the HVAC equipment is being installed over epoxied floors. Robitaille testified that he spoke to Rami the day he took this picture, and that Rami expressed no concerns. The last of the photographs was taken on March 19, 2018, and appears to show the renovations to be largely completed.
[51] Robitaille was asked about emails sent by Fulton dated between March 26 and April 4, 2018, identifying certain deficiencies in United’s work such as gaps in caulking, uneven seams in the panels, and missing door sweeps and stoppers. Robitaille testified that these were small items, which were addressed by United.
[52] Robitaille noted that on April 1, 2018, Rami emailed all contractors on the project, including United, setting out the schedule for that week. Rami confirmed that everyone and all equipment would have to be off the site by Wednesday, April 3, 2018, so that the facility could be sanitized. Robitaille understood from this email that the cannabis plants were about to arrive.
[53] Robitaille stated that he remained on the site until after Easter. This evidence was confirmed by Robitaille’s email to Fulton of April 4, 2018, stating that Robitaille would be at the site on April 4 to go over the concerns listed by Fulton.
[54] Robitaille testified that United walked off the project one and a half to two weeks after Rami’s email of April 1, 2018, because United’s last invoice had not been paid, leaving United unable to pay its subtrades, and with the lien deadline of 40 days of non-payment approaching. Prior to that period of non-payment, United had always been paid on time. Citing non-payment of outstanding invoices, United left the job site on April 12, 2018, and registered a construction lien.
[55] Robitaille testified that 182 did not complain about or dispute any of United’s invoices. Also, while United was on-site, 182 made no written or recorded complaints about United or its subtrades.
[56] Robitaille was asked about an email dated April 13, 2018 – sent after United walked off the site – that identified that United had erected paneling that covered over a vent in a drying room. Robitaille acknowledged that United did cover a vent and some electrical outlets, but that United corrected those errors by cutting holes in the paneling.
[57] Robitaille was also asked about problems with the epoxy floor and with screws missing in window frames installed by United. Robitaille stated that he had was not aware of complaints that may have been alleged after United had left the job site, but that any problems brought to his attention while United was still on the site were dealt with.
[58] In his evidence, echoed by English in her testimony, Robitaille stated that he believed 182 stopped payments because Rami was upset and angry with Robitaille and English for deciding not to join Rami in a partnership. More will be said about that later in these reasons.
Email of December 12, 2017
[59] Robitaille was cross-examined about his email to Rami of December 12, 2017. Robitaille testified that this email was in response to Rami asking him what he thought the costs would be “without add-ins”. It was not intended to be a fixed quote.
[60] The email is entitled: “Budgett to Complete Beach” (sic). It begins: “Aprox 6 wks weekends Included”. Robitaille testified that the email identified work that Robitaille believed was left to be done by all the trades and that his list included work that was not the responsibility of United, namely: sea containers, regular deliveries, and safety sprinklers.
[61] Following the list, the email identified materials he had ordered and the expected delivery date and then reads:
$350 thousand,
Unaccounted for changes not seen the information
No info on or unforeseeable – heavy deliveries, digging to road of existing concrete in tr trench line
Unloading of heavy equipment
discovery in perimeter block walls to carry roof platforms material depends on engineering
[62] Robitaille acknowledged that his estimate of $350,000 was significantly less than the amount invoiced by United.
[63] Significantly, despite the new defence raised by 182 at trial that the December 12, 2017 email from Robitaille constituted a “fixed quote contract”, and as discussed more fully below, 182 produced no email or other evidence confirming 182’s belief that the agreement between the parties had changed. Also, in apparent contradiction of Rami’s evidence that the email of December 12, 2017, evidenced United’s agreement to complete all work required of it from that date forward for $350,000, 182 thereafter paid United a total of over $552,000.
ENGLISH’S EVIDENCE
[64] English testified for United that she and Robitaille are spouses and co-own United. English is United’s bookkeeper and business manager and prepared the invoices that are the subject of United’s claim. English testified that, according to her accounting records, as of April 12, 2018, United had $354,125.85, including “late fees”, in unpaid invoices submitted to 182.
[65] English testified that she sent the invoices as directed by Rami and that they were always accompanied by an account summary. English prepared the invoices using timesheets and time logs provided to her from United’s employees and as confirmed by Robitaille’s own records. English retained records of all time recorded by United’s employees, including Robitaille, as well as copies of all supplier’s and subtrade invoices. English relied on those records when preparing United’s invoices to 182.
[66] English testified that she typically submitted invoices every 30 days. She identified Rami as the owner of Radicle and as the “customer”.
[67] English calculated the amounts still owing on invoices submitted by United to 182. Her calculations included a credit of $1,448.40 applied toward invoice #2011, the first of United’s invoices with respect to which, 182 did not make payment in full.
[68] At trial, United marked as an exhibit a spreadsheet prepared by English, purporting to list outstanding invoices. This evidence was difficult to follow as, in creating this spreadsheet, English included amounts shown in “updated” invoices, which included a 3% “late fee”. Adding to the confusion about amounts invoiced was the fact that English used the same invoice number for her updated invoice, which now included a 3% late fee.
[69] To address this confusion, English printed off copies of the original invoices that did not include any late fees. These exhibits were marked at trial as Exhibits 20A to 20F and include copies of the following invoices[^5]:
(1) Invoice #2011 dated January 23, 2018 $20,146.19
(2) Invoice #2032 dated February 22, 2018 $21,249.63
(3) Invoice #2033 dated February 22, 2018 $ 67,222.57*
*This invoice was revised and re-submitted to 182
to show the correct hours, fee was unchanged.
(4) Invoice #2034 dated February 22, 2018 $ 18,923.31
(5) Invoice #2035 dated February 22, 2018 $ 13,444.74
(6) Invoice #2036 dated February 22, 2018 $ 13,890.06
(7) Invoice #2037 dated February 22, 2018 $ 22,396.79
(8) Invoice #2038 dated February 22, 2018 $ 30,045.12
(9) Invoice #2039 dated February 22, 2018 $ 7,378.63
(10) Invoice #2043 dated March 20, 2018 $ 44,945.75
(11) Invoice #2044 dated March 20, 2018 $ 4,407.00
(12) Invoice #2045 dated March 20, 2018 $ 2,818.66
(13) Invoice #2046 dated March 20, 2018 $ 23,052.00
(14) Invoice #2047 dated March 27, 2018 $ 4,407.00
(15) Invoice #2048 dated March 27, 2018 $ 2,938.00
(16) Invoice #2049 dated March 20, 2018 $ 473.58
(17) Invoice #2052 dated April 6, 2018 $ 28,373.74
(18) Invoice #2053 dated April 6, 2018 $ 7,100.99
(19) Invoice #2059 dated April 12, 2018 $ 15,254.91
Total Outstanding: $348,468.67
Less: credited from payment of February 18, 2018 ($ 1,448.27)
BALANCE OWING: $347,020.40
[70] English testified that 182 never raised any questions about amounts invoiced. Had it done so, English would have been willing and able to produce United’s timesheets and all supplier and subtrade invoices.
[71] English testified that she contacted Rami to ask why United’s February 2018 invoices were not paid. No reason was given. Only after United registered a lien did 182 assert that non-payment was because of deficiencies. English testified that at a meeting with him on April 3, 2018, Rami mentioned nothing about any deficiencies, but said that 182 intended to hold back 10% on all invoices rendered on the project. English stated that, in her experience, holdbacks are not usually taken on invoices based on labour and materials.
[72] English testified that she noticed a change in Rami’s behaviour toward United after she and Robitaille told Rami that they had decided not to go into partnership with Rami: she found Rami harder to reach, less cordial, and less polite.
[73] In cross-examination, English confirmed that Ziad had asked her for copies of invoices. In his email, Ziad advised that his copies had been misplaced “due to a change in bookkeeper”. English also testified that she sent the invoices as directed by Rami: sometimes to Fulton, sometimes to Ziad.
[74] In cross-examination, English was asked about Robitaille’s email of December 12, 2017, and whether she understood this to be a “fixed fee” quote. She responded that she knew that Robitaille and Rami had discussed “something”, but it was a “ballpark number”; Robitaille’s email was not entered as a fixed fee quote in United’s logbook.
[75] English was not aware of any complaints made by 182 about United’s work, aside from some outstanding deficiencies; nothing of any severity or that was uncommon for a job of that size.
EVIDENCE OF 182
[76] 182 called two witnesses: Rami and Ziad.
RAMI’S EVIDENCE
[77] Rami testified that although he had been around construction sites for approximately 15 years as a business owner, he had no experience directing construction work or expertise supervising a construction site.
[78] Rami also testified that when he first discussed his plan to build a cannabis growing facility with Robitaille, Rami understood that Robitaille wanted to take on more responsibility on the project than Rami had initially envisioned. In chief, Rami testified that Robitaille was to be more like the “general contractor” to handle the project, while 182 was to ensure the work was completed on time and on budget. Fulton was to coordinate with the subcontractors and was brought in to help Robitaille and to help as project manager.
[79] In cross-examination, Rami’s evidence changed somewhat. He agreed that Beach Rd. was a project that he and Ziad were putting together; that Rami was then acting on behalf of Radicle, who was to be the tenant, and also on behalf of 182, who was the contractor.
[80] Rami also agreed that Fulton was hired to help him manage the construction; that it was more Fulton, as opposed to Rami or Ziad, who directed the project. Rami acknowledged that he was one of the people supervising.
[81] Rami agreed that Radicle had retained 182 to build the cannabis facility and that he was the president of Radicle when United was hired. Although it was always intended that Ziad would run the cannabis operation, Rami entered into the lease of Beach Rd. for Radicle.[^6]
[82] Rami also confirmed that:
(a) until receiving the Robitaille email of December 12, 2017, 182’s agreement with United was as described by Robitaille and English: time and material, with a premium of 15-20% to be charged by United on its subtrades and suppliers;
(b) in keeping with evidence given by English, Rami directed invoices to be sent to him and later, to him, Fulton and Ziad; and
(c) it was primarily Fulton who reviewed the invoices and confirmed whether work had been performed correctly because Fulton was always on site.
Email of December 12, 2017
[83] In his evidence in chief, Rami disputed Robitaille’s evidence that the work outlined in Robitaille’s email to him of December 12, 2017, included items that were not the responsibility of United. Rami stated that all the work listed was for United to complete. He asserted that the email changed the nature of 182’s contractual relationship with United to a fixed quote agreement.
[84] However, Rami did not offer any email or other tangible evidence to show that 182 treated Robitaille’s email as a fixed quote agreement, nor that 182 had accepted that the original agreement had been changed, nor that 182 now relied on the alleged fixed quote agreement.
[85] Rami testified that he was relying on the December 12, 2017, email for his budget to complete the Beach Rd. work, but English acted as if the email did not exist.
[86] In apparent contradiction to his testimony, Rami also testified that, notwithstanding the December 2017 “fixed quote” of $350,000, 182 paid a total of $552,278.51 to United, more than $200,000 above the alleged fixed quote.
[87] Other than for Rami’s trial testimony, 182 provided no evidence that it communicated to United that 182 was treating the December 2017 email as a binding fixed quote. In addition to the evidence as to the amount paid to United, which was well in excess of the alleged fixed quote, the informal nature of the email also undermines Rami’s evidence on this point.
[88] In chief, Rami was asked to identify complaints about United’s work that existed prior to February 2018. Rami listed: (i) timeliness to finish; (ii) Robitaille being absent from the site, especially near the end of the job (an issue, Rami asserted, that both Fulton and Ziad had raised with Robitaille); and (iii) quality of work. However, despite his oral evidence at trial, in which Rami was able to articulate a list of deficiencies, he failed to produce any note, email, text, or any record that might corroborate his testimony.
[89] Similarly, while Rami was able to describe problems with the epoxy floor, which, he testified, had to be ground off and re-laid, he did not name the contractor who did the work, nor did he produce an invoice showing what work was done, or at what cost. In cross-examination, Rami acknowledged that he understood the obligation to present cogent evidence to support his allegations. Rami claimed to have made notes of the charge-backs, but did not produce them at trial.
[90] Rami’s testimony and the utter absence of evidence – which he knew to be important – is perplexing. As noted, even if the anecdotal evidence given by Rami and Ziad about deficiencies in the work done could be accepted at face value – which would be unlikely given the contradictions in the evidence – 182 offered no tangible evidence whatsoever from which to calculate any charge-back or reduction.
[91] The same observation applies to Rami’s evidence that 182 hired contractors at $25–$65 per hour for a total of almost 2,000 hours and/or it did the work itself to repair other deficiencies - problems with door sweeps; drain covers covered with epoxy; lots of cleanup work; costs incurred to tarp off areas, so as not to contaminate the rooms when the floors were being re-done. Rami failed to produce any invoices, photographs, or any corroborative evidence to support his trial testimony.
[92] In cross-examination, Rami acknowledged that in the “Easter” email of April 1, 2018, sent to all contractors (Trial Exhibit 9) listing items to be done, nothing is mentioned about the floors. Rami asserted that the problems were only discovered when the equipment was “fired up”. Again, there is no cogent evidence to support Rami’s assertion.
[93] Rami claimed that when he received English’s running summary of accounts showing amounts owing (Trial Exhibit 17, Tab 23), he questioned her, but acknowledged at trial that none of these alleged emails were put into evidence at trial.
ZIAD’S EVIDENCE
[94] In his trial testimony, Ziad confirmed that he was regularly on site and that when any concerns with United’s work was identified, United would come back to try to rectify any problems. Ziad confirmed that 182 brought in trades for HVAC, lighting and electrical, plumbing and a security team; he also confirmed Robitaille’s evidence that the epoxy floors were damaged by equipment and machinery used after floors were laid.
[95] Ziad stated that there were minor issues relating to the HVAC that were easily fixed. He also testified that United did come back to reglue FRP in the quarantine room and that the issues which remained could be fixed by Ziad’s team; problems he described as “just sloppy stuff”, nothing that required trades to repair.
[96] Ziad echoed Rami’s evidence about problems with the floors. He testified that the floors had to be ground off and re-epoxied, and that after the floors were laid, much time was spent on hanging plastic in other rooms so that dust did not enter and contaminate other rooms. Ziad testified that the work took weeks because it had to be done in stages so that Radicle could continue to operate in other areas while the work was going on.
[97] Again, Ziad was not able to provide any contract, invoice, or even identify who was hired to do the work.
[98] Ziad was asked about any complaints with the invoices submitted by United. His evidence was that he spoke to Fulton and Rami about why United was charging to fix work that had not been done properly, but he never spoke to United. Similarly, Ziad stated that Radicle paid $352,000 to 182 but did not understand why more payments were being requested and wanted to know the scope of work to be done, and questioned Fulton and Rami. Ziad also testified that he reviewed the invoices for which Radicle paid $352,278.51 and, later, a further $200,000, and without saying that Radicle agreed with the amounts paid, it did not want to create a feud that would worry its investors.
[99] Again, these is no paper trail to corroborate Ziad’s evidence. Significantly, Zaid did not assert that he understood that United had submitted a fixed quote.
EVIDENCE RE: PARTNERSHIP
[100] Rami testified that he had hoped to go into the construction business and to form a partnership with United: Robitaille had decades of experience in the construction industry whereas Rami did not, and Rami had plans to embark on a number of construction projects and thought that this new partnership would be a perfect fit. As discussed below, that partnership did not get off the ground.
[101] As previously noted, Robitaille testified that, in his view, the only reason 182 stopped paying United’s invoices was that Robitaille and English had decided not to proceed with a partnership with Rami and 182.
[102] At trial, 182 objected to Robitaille giving evidence about the proposed partnership among Robitaille, English and Rami, or their respective corporations. 182 submitted that evidence about a possible partnership was irrelevant to the issues to be determined at this trial. Robitaille responded that the evidence was relevant in that it supported Robitaille’s evidence that 182 had no complaint about the work performed by United, and that the real reason that United’s invoices were not paid was that Rami was unhappy that Robitaille and English had declined to go into a partnership with him.
[103] 182’s objection was not accepted, and Robitaille and English were permitted to give evidence about the proposed partnership. They were also cross-examined at some length about the partnership and about Rami’s claim to have helped United by: (i) identifying that United needed a more suitable work space and helping search for a new location; (ii) providing a letter to the bank to assist United in obtaining mortgage financing to buy the new building; and (iii) assisting United in updating it business model by incorporating itself and arranging employee benefits, usual in the industry.
[104] In his evidence, Rami also testified at some length about the time and money he had invested to help United in the expectation that Robitaille would assist Rami’s ambition to undertake future construction projects, for which Rami needed Robitaille’s construction expertise and from which Robitaille and English would benefit financially.
Findings of Fact
[105] Despite the considerable amount of trial time spent on it, nothing turns on the reasons for the failure of the proposed partnership.
[106] As noted above, 182 provided no tangible evidence to support the bald allegations made by Rami and Ziad about alleged deficiencies in United’s work. Based on the lack of evidence put forth by 182 at trial, particularly with respect to its entitlement to “charge-backs”, I find that 182 has failed to establish any valid defence to United’s claim for payment of its invoices in full.
[107] I find that it is plain and obvious from its form and content that the December Email could never have been intended by United as a binding quote upon which either party could legally rely nor, realistically, could 182 have treated it as such. Whereas the fixed quote submitted to Rami on May 1, 2017, and later withdrawn, was prepared on United’s letterhead, contains a quote number, an expiry date, a detailed breakdown of the work, etc. the December Email, sent late in the evening, is replete with typographical errors, lacks a quote number or expiry date and contains a very brief list of tasks to be completed, some of which, Robitaille testified, were not even assigned to United.
[108] Based on the evidence I accept, I conclude that with respect to the invoices that are the subject of this action, 182 had agreed to pay United on a labour and materials basis.
Orders Granted:
A. This Action
[109] Based on the evidence as a whole, I am satisfied that the plaintiff has established that amounts invoiced by United, and for which it seeks payment, are properly payable by 182 pursuant to the oral agreement it had with United. Judgment is, therefore, granted as per paragraph 17 16 above.
B. Costs of this Action
[110] As the successful party on this motion, it is reasonable for United to expect to be awarded its costs.
[111] I would urge the parties to attempt to reach an agreement on costs. However, if they are unable to do so, then costs submissions shall be made as follows:
Within 21 days of the date of the release of this decision, United shall serve 182 with its written costs submissions, not to exceed three pages, double-spaced, together with a draft bill of costs, and copies of any relevant offers to settle. These are to be submitted to me by filing them, via email, through the Trial Co-ordinator.
Within 14 days of the service upon it of United’s costs submissions, 182 shall serve and file its responding submissions, of no more than three pages, double-spaced, together with its draft bill of costs, and copies of any relevant offers to settle.
If United seeks to deliver reply submissions, it may do so within 7 days of service upon it of 182’s costs submissions. Reply submissions shall not exceed one page in length.
If no submissions are received within 35 days of the date of the release of these reasons, the parties shall be deemed to have resolved the issue of the costs and costs will not be determined by the court.
C. Related Litigation
[112] By Order of Justice Parayeski made, on consent, on June 28, 2021, the trial of this action and Action No. 20-72481 were to have been heard together or one following the other. On the first day of this trial, counsel advised that Action No. 20-72481 was not ready for trial: pleadings were not completed, discoveries had not taken place, and the action had not been set down for trial.
[113] United is also the plaintiff in Action No. 20-72481 and represented by Mr. Di Gregorio. The defendants/plaintiffs by counterclaim in Action No. 20-72481 are Radicle, Rami, Ziad and Upadhyaya Rakeshkumar. They are represented by Mr. Rosenblatt. As noted, Rami and Ziad are shareholders and/or officers and directors of Radicle. Rami is the sole owner of 182 and both he and Ziad were involved in the Project.
[114] At the outset of this trial, the parties filed a consent pursuant to which they agreed as follows:
(20) that the court’s determination in this action of United’s damages shall be binding on all parties in this action and in Action No. 20-72481;
(21) that the counterclaim brought by 182 in this action shall be dismissed, with costs to be determined;
(22) that any judgment awarded in this action will not be enforced until judgment has been rendered in Action No. 20-72481 or as may be agreed among the parties; and
(23) that Action No. 20-72481 will address the defendants’ counterclaim as well as the liability to United, if any, of the defendants/plaintiffs by counterclaim.
[115] The parties also agreed on a timetable to be followed in Action No. 20-72481. The timetable is the subject of a separate order and contemplates that Action No. 20-72481 will be set down for trial by November 2022.
[116] By virtue of the order of Parayeski J., requiring that these matters be heard together, I am seized of Action No. 20-72481.
Justice L. Sheard
Released: June 21, 2022
COURT FILE NO. 18-65526
DATE:20220621
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
United Glass Services Inc.
Plaintiff
- and -
2138825 Ontario Inc. and 1826458 Ontario Inc.
Defendants
AMENDED REASONS FOR JUDGMENT
L. Sheard
Released: June 21, 2022
[^1]: Court File No. 20-72481, commenced at Hamilton, Ontario. [^2]: As these persons share the same last name, for convenience, and not out of any disrespect, they are referred to in these reasons by their first names. [^3]: If there is an arithmetical error in the calculations, the parties may so advise the court through the Trial Co-ordinator, and, if required, may seek a brief hearing before me to address the error. [^4]: See 3., above. [^5]: Although referenced in the spreadsheet prepared by English (Trial Exhibit 17, Tab 23 of the Exhibit Brief of the Plaintiff), a copy of Invoice #2012 was not included among the invoices in the copy of Exhibits 20A to 20F provided to the court, and, for that reason only, it is not included in the above totals. [^6]: As mentioned at the start of these reasons, in this action, my findings concern the amounts that may be owed to United by 182. I make no finding as to the liability of any other person or entity to United. Those questions remain to be determined in Court File No. 20-72481.